City, county in dispute over shares of local sales tax
By Michael Prochaska
Morgan County and the City of Madison will settle a disagreement later this month or in August over their respected shares of Local Option Sales Tax (LOST) revenue.
The Board of Commissioners and County Manager Michael Lamar are advocating an increase in the county’s allocation of LOST revenues from 73 to 77 percent. Under two suggestions, the City of Madison would either receive a decrease in shares from 22 to 19.5 percent or from 22 to 21 percent. Rutledge could see a decrease from 4 percent to 1.6 percent or from 4 to 3.4 percent.
The county has argued that LOST and other sales tax revenue, such as SPLOST (Special Purpose Local Option Sales Tax) and ELOST (Education Local Option Sales Tax), helps offset a decrease in the county’s tax digest.
LOST funds tend to keep property tax rates down. For example, Morgan County is expected to maintain a millage rate of 8.99 mills in spite of a 14 percent decrease in property tax revenue.
Madison was able to roll back property tax to 5.466 mills from 8.587 mills in the 2011 fiscal year due largely to LOST revenue.
According to the Georgia Municipal Association, LOST distribution is based on eight criteria – service delivery to the population served, service delivery specific to resident population, service delivery in relation to the responsibilities of local governments, distribution changes and debt obligations, point-of-sale, intergovernmental agreements, tax equity and any coordinated plan of county and municipal service delivery and financing.
“Madison is a market center for the county and for the region to a certain extent,” said City Manager David Nunn.“Madison has a strong tourism base to bring visitors here … Those are the kinds of things that we take into consideration.”
Nunn said that the last time city LOST shares were below 20 percent was in the 1980s.
County Manager Michael Lamar said that point-of-sale is not enough of a factor to justify the city keeping its current share or increasing its share.
“The city feels like that because they have a larger retail center that they deserve half the money, and I don’t,” he said, adding that the population rate of Morgan County has outpaced that of the City of Madison.
Because the county and city could not reach a compromise last month, the Carl Vinson Institute of Government at the University of Georgia will serve as an official mediator during a 60-day deadline.
If not resolved by a mediator, the LOST levy will be decided by the Ocmulglee Superior Court, which will either rule in favor of the city or county but, by law, cannot grant a compromise. The new distribution formula would then not go into effect until 2013.
Madison is the only municipality with a large enough population to be represented in the negotiations despite the fact that LOST revenue is also allocated to Rutledge, Bostwick and Buckhead.
Printed in the July 5, 2012 edition